C.RF-Tshr(hyt/hyt) mice have a mutated thyroid stimulating hormone receptor (P556L-TSHR) and these mice develop severe hypothyroidism. We found that C.RF-Tshr(hyt/wild) heterozygous mice are also in a hypothyroid state. Thyroid glands from C.RF-Tshr(hyt/wild) mice are smaller than those from wild-type mice, and (125)I uptake activities of the former are significantly lower than those in the latter. When TSHR (TSHR(W)) and P556L-TSHR (TSHR(M)) cDNAs were cloned and co-transfected into HEK 293 cells, the cells retained (125)I-TSH binding activity, but cAMP response to TSH was decreased to about 20% of HEK 293 cells transfected with TSHR(W) cDNA. When TSHR(W) and TSHR(M) were tagged with eCFP or eYFP, we observed fluorescence resonance energy transfer (FRET) in HEK 293 cells expressing TSHR(W)-eCFP and TSHR(W)-eYFP in the absence of TSH, but not in the presence of TSH. In contrast, we obtained FRET in HEK 293 cells expressing TSHR(W)-eCFP and TSHR (M)-eYFP, regardless of the presence or absence of TSH. These results suggest that P556L TSHR has a dominant negative effect on TSHR(W) by impairing polymer to monomer dissociation, which decreases TSH responsiveness and induces hypothyroidism in C.RF-Tshr(hyt/wild) mice.